Is There a Skin in the Game?

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If government us. Stopped bailing out banks, there would be a natural skin in the game. And we seem to find it difficult to avoid. There's no wee here. The politicians find it difficult. I don't idea of it doesn't bother me. But somehow the politicians can't seem to bear to let these people have skin in thegame. Ye e. O, with respect to fat tales, because they never really give too much thinking to fat tales,. Other than saying, well, it's the tasal problem, and we can't talk about it because we do not understand it by ritually dealing with it as part of life. If we don't

Nassim Taleb of NYU-Poly talks with EconTalk host Russ Roberts about his recent paper (with Constantine Sandis) on the morality and effectiveness of "skin in the game." When decision makers have skin in the game--when they share in the costs and benefits of their decisions that might affect others--they are more likely to make prudent decisions than in cases where decision-makers can impose costs on others. Taleb sees skin in the game as not just a useful policy concept but a moral imperative. The conversation closes with some observations on the power of expected value for evaluating predictions along with Taleb's thoughts on economists who rarely have skin in the game when they make forecasts or take policy positions.